WBD Shocker! Says Paramount Sweeter Offer Might Lead To Better Deal Than Netflix, Will Continue Talks With David Ellison Company

Big news. The ground has shifted as Warner Bros. Discovery said its board determined tha a new proposal from Paramount could reasonably be expected to lead to a so-called “Company Superior Proposal” as defined in WBD’s merger agreement with Netflix and that it will continue talks with the David Ellison company.

The sweeter bid includes an increased purchase price of $31 a share in cash, plus a daily ticking fee of $0.25 per quarter beginning after September 30, 2026. It includes a $7 billion regulatory termination fee payable by Para if the transaction does not close due to regulatory roadblocks, payment by PSKY of the $2.8 billion termination fee that WBD would be required to pay to Netflix to terminate its existing Netflix deal, an obligation to contribute additional equity funding to the extent needed to support the solvency certificate required by PSKY’s lending banks, and a “Company Material Adverse Effect” definition that excludes the performance of WBD’s Global Linear Networks business.  

WBD said the Board has not made a determination as to whether the revised PSKY proposal is superior to the merger with Netflix. WBD will engage further with PSKY to determine if a proposal that constitutes a “Company Superior Proposal,” as defined in the Netflix Merger Agreement, can be reached. In the event that the Board ultimately determines such a “Company Superior Proposal” has been received, Netflix will have four business days after such determination to negotiate with WBD and to propose any revisions to the Netflix transaction.

“There can be no assurance that the Board will conclude that the transaction proposed by PSKY is superior to the merger with Netflix or that any definitive agreement or transaction will result from WBD’s discussions with PSKY.  The Netflix Merger Agreement remains in effect, and the Board continues to recommend in favor of the Netflix transaction and is not withdrawing or modifying its recommendation,” it said.

More to come